Q3 2025 Nebius Group Earnings Call
Undertake no obligation to update any forward-looking statements.
During this call, we will present both gaap and certain non-gaap Financial measures a Reconciliation of gaap to non-gaap measures is included. In today's earnings, press release. The earnings press release shareholder letter and accompanying. Investor presentation are available on our website. At netas comhub the an Investor Hub. And now I'd like to turn the call over to our kathi.
Hey, Neil. And thank you everyone for joining the call today.
I'd like to share my thoughts about the demand environment.
Uh, about our capacity plans and what we are doing, you know, product.
First about the demand.
Q3 demand was very strong. We sold out all of our available capacity.
We continue to see a consistent trend: every time we bring capacity online, we sold all of it.
Uh, with a new generation of Nvidia black girls coming online. More customers are interested in purchasing capacity in advance and securing it. It's for a longer period of time.
Uh, today we are very pleased to announce that we signed another major deal, this time with Meta, for approximately $3 billion over the next 5 years.
In fact.
The demand for, for this capacity was overwhelming and the size of the contract was limited to the amount of capacity that we had available.
which means that if we had more, we could have sold more
This will comes on top of the Microsoft deal. We announced earlier in September
With a contract value between $17.4 billion and $19.4 billion, as we said weeks back, we are signing more of these large long-term deals, and we are delivering on the promise.
As busy as we are with this Mega deals, our main focus is still to build our our own core AI Cloud business.
We made great progress here, with AI native startups, like corser, black forest labs and others.
The economics and the cash flow of Mega deals are attractive in their own, right?
But they, uh, all feel, uh, enable us to build our core AI Cloud business faster. This is our real future opportunity.
uh,
Now, on the capacity.
Uh in order to meet the growing demand. We have accelerated our plans to secure more capacity and this is actually our main focus for now.
Capacity today is the main bottleneck to revenue growth.
And we are now working to remove the bottleneck.
As we look uh, to 2026, we expect our contractor, call to grow to 2.5 gigawatt contractor.
This is up from the 1 gigawatt in our previous earnings calls in August.
furthermore uh, with 1 to have power connected, to our data centers, which means fully built
of approximately 800 megawatt to 1 gigawatt, by the end of 2026, by the end of next year,
Well, we made significant investments in our capacity footprint. We also investing in our main product. Our AI cloud,
To extend our addressable Market opportunity, uh, to larger Enterprise customers. We released our new Enterprise ready Cloud platform version 3.0 called are and our new inference platform called Medias talking Factory.
We Believe effort, gives organizations the trust control, and simplicity, they need to run, uh, their most critical AI workloads.
Neighbors talking Factory uh is a production scale. Inference platform that enables organizations to run open source models with reliability visibility and control.
And we have a large pipeline of new software and services that we are continuing to build, which will differentiate us from other Cloud companies.
Based on the strength of demand that we see and our accelerated capacity growth plan, we believe we can achieve analyze the run rate revenue.
Of $7 to $9 billion by the end of 2026.
In summary, Nebius is positioned to win in this large and rapidly expanding AI Cloud market. We're just beginning to realize the powerful potential of the EI Revolution that is underway.
Quickly becoming 1 of the primary cloud and infrastructure providers to support it.
And with this, I would like to hand the call over to our ca4 data alone.
De please. Thank you.
Performance can be found in our shareholder letter. I'd like to provide some additional color to the quarter discuss a financing options and conclude with 2025 guidance.
Q3 Group revenue was $146 million, up nearly 355% year-over-year and 39% quarter-over-quarter.
Annualized run rate revenue for the core business at the end of September was $551 million.
The core infrastructure business, which accounted for nearly 90% of total revenue, grew 400% year-over-year and 40% sequentially.
Once again, we sold out of capacity, and our revenue growth was limited only by the capacity that we were able to bring online.
I'm also pleased to say that at the margin for the core infrastructure business expanded quarter over quarter to nearly 19%.
On financing in order to support our aggressive growth plans in 2026. And to maintain this pace of growth in 2027. We will be utilizing at least 3 sources, corporate debt asset back, financing and equity.
We are in the process of raising asset back dirt, which will be able to secure with a tactic terms to fortify credit worthiness of our largest customers.
Tomorrow, November 12th, we will be putting in place. An add the market Equity program for up to 25 million Class A shares and a plan to Phi and plan to file a prospective supplement.
We will evaluate the program regularly based on our capacity Capital needs.
The program enables us to access equity funding on an efficient ongoing basis. However, we will remain division-sensitive as we prepare to finance future growth opportunities.
Now, I would like to turn to 2025 guidance.
As we approach the end of the year, we are tightening our full-year group revenue guidance to a range of $500 million to $550 million. We are currently positioned towards the midpoint of that range. This compares to the $450 million to $630 million in our previous guidance.
The reason we are in the middle and not at the top of that range simply relates to the exact timing of when capacity comes online.
Our current momentum and long-term trajectory remain extremely strong.
Our annual run rate Revenue which is a good reflection of our future growth opportunity, continues to expand demonstrating the resilience and scalability of our business model as such we remain. Well on track to hit our our guidance of 900 million to 1.1 billion dollars by the end of 2025. While also Paving the way for substantial annualized, ground rate, Revenue growth in 2026 and Beyond. In terms of the mega deals, we will begin serving Microsoft and methods played in the quarter and almost all of the revenue from these deals will start to be realized and ramp up during the course of 2026.
We plan to give full year Revenue guidance for 2026 next quarter.
Turning to adjusted. Evida as we have previously indicated, we expect to be slightly positive at the group level by SDR and while remaining negative for the full year.
Regarding CapEx, we are raising our 2025 guidance from approximately $2 billion to circa $5 billion.
This acceleration, reflects our strong conviction in the demand Outlook and our decision to secure critical infrastructure, including Hardware power, land, and key sites.
This Investments are so big enablers of future growth and will position us exceptionally well to capture the opportunities ahead.
In summary, we have a large and rapidly growing opportunity in front of us, and we are executing with focus and discipline to capture it. While delivering substantial, sustainable growth, we are setting the stage for strong long-term profitability.
Now, let me turn the call over to Neil for Q&A.
Great. Thank you. Tara.
We'll give it a moment to collect questions from the online platform and then we'll begin the Q&A.
New meta deal. Um, why did you choose us? Why would they choose you, and how should we model the deal? Aati.
Well again, as we’re happy to announce today, this new deal with Meta is approximately $3 billion.
Uh as I said the size of the deal uh was limited only by the capacity that we had available.
And if we had more capacity, we could have decided on a bigger deal, probably.
Uh, after we announced Microsoft September, uh uh we said that we will have more deals of this kind more large deals.
And actually delivering on that promise. And we actually, we, we are optimistic.
uh,
as these bills that these bills will arise more and more.
However,
uh,
However, the deals are uh, important, this negatives. Uh, it is important to stress that uh, we will remain focused on developing of our, our own AI cloud.
Which uh, which country sells not only uh, these big deals, but AI startups and Enterprises.
And, uh, ultimately, we believe that, uh, these large contracts provide us with great sourcing, uh, of, uh, financing for us to continue building our core AI Cloud business.
Great. Thank you.
We'll take the next question from Alex. Duval, or analysts from Goldman Sachs.
Uh, so we provided the updated 2026, our Outlook of 79 billion. What exactly is in the 79 billion. Our Target
And is this based on pre-existing Core Business plus Microsoft and meta? Is there anything else in terms of signing up for large deals? Mark? Maybe you can take this 1
Uh, thank you Alex, for your question and um, let me walk you through the building blocks of how we get to the 7 to 9 billion in ARR. Um, first of all, as we already shared, um, we had a bottleneck in capacity and we worked extremely hard over the last several months to unblock this bottleneck. Um as we shared we plan to have um 800 megawatts to 1 gigawatt of connected Power by the end of 26 and 2.5, gigawatts of contracted power.
Second.
We see the demand out there from AI startups to Enterprises to the large strategics.
And we see that client demand that we were unable to sell this past year due to a lack of capacity.
And we strongly believe that the capacity we are putting in place in Q3.
Will help us to meet more of this demand at the end of the day.
We will allocate between the categories of customers based on the individual economics of the deals they represent.
Thirdly.
This new capacity that we are putting in place.
Together with our current capacity that has already been sold.
and the long-term contracts that we signed with Microsoft and Meta.
gives us the confidence that we can achieve the 7 billion to 9 billion in the Barr of which more than half is already booked.
Great. Thank you. Mara.
See we'll we'll take another question from Alex at Goldman. Um can you walk us through the timeline of your infrastructure build out for a Q4, 25 and 26? And what gives you confidence that that you can reach your 2.5? Gigawatts uh, goal for contracted capacity.
Andre Lowe. Yeah, thanks FedEx. Um so we are ramping up our capacity uh as fast as we can to accelerate our growth uh for the next year and Beyond
Um, we are happy, uh, to launch now. Already Israel and the UK.
And all the capacity in those regions, uh, was pre-sold.
Before the launch.
And we are growing with a number.
Of the regions where we are present. And we also, um,
Bringing new capacity online in the current sites.
We are also coming online in New Jersey. We are launching new phases of Finland.
We have also presolve by the way.
Uh is when you're going to 6, we will continue scaring the existing data centers, including UK Israel.
New Jersey, and we have new data centers already in development.
Both in us and Europe.
And they start.
The common line in the first half of 2026.
We are also in the process of securing several new large sites, which we believe will add hundreds of megawatts.
Um, and some of those will go online by the end of 2026.
so overall, at the moment we are looking at more than
Around 2.5, gigawatts of contracted power.
Um, by the end of 2026.
And as we said, demand is growing massively, and we are very focused on rapidly building the capacity and the future pipeline.
Uh, to meet the demand in 26.
And beyond great.
Thank you, Andre. Um,
All right, we'll take a question from some of the folks who have been submitting questions. Beginning with a lot of questions on Microsoft and Meta revenue. How should we be thinking about revenue contribution from Microsoft and Meta deals for this year and going forward?
well, the Microsoft contract will not have a material effect on our revenue, and our in 2025, as the first Branch was just delivered
All of our remaining branches will be delivered in 2026 with more than half of them during the second half. So we actually expect Revenue to ramp up over the course of the year.
Studying 2027, we will begin to recognize the full annual revenue, run rate of this Microsoft deal.
With regards to meta, we will be concluding the deployments within the next 3 months. So we expect to mostly be at a full Revenue, run rate in 2026
Great, thank you, Donna.
Um, maybe another question from our online audience. What does the overall demand environment look like in Q4 and into the next year?
Mark, do you want to take this?
Certainly certainly.
I joined the company about 5 months ago and I've had an extraordinary experience in these past 5 months.
It's extraordinary from the standpoint that I've never seen the kind of demand profile that we're experiencing. It is literally accelerating for nebulous and I believe as well for the broader Market. Um,
as an example in the recent quarter in quarters before we saw pipeline generation, this is opportunities by customers that want to buy from us. Um, expand. As a matter of fact in the past quarter Q3 we saw pipe, Jen expand, 70% quarter on quarter and we generated
$4 billion in the pipeline in that quarter. However, we were only able to convert a portion of that due to the constraints of our capacity.
Um, as a matter of fact, um, I've learned a new skill, when I don't think many go to market professionals have ever had to experience, and that's learning to say, no to customers. As we routinely sell out, and have to, actually let them down lightly and try to convince them to purchase in the future.
As I look out to 2026.
Um, and I think through the, the demand profile, the kind of pipeline that we're generating right now is giving us high confidence to continue to expand our results and drive towards the ARR growth that our kathi mentioned earlier on the call.
Great. Thanks. Mark.
Uh, we have a question now from 1 of our analysts Nao Choi. From Northland incremental, are in September quarter, was around 12 million down from 180 million in the prior quarter and 159 million in the March quarter. Why is incremental are down? Now, it's, it's a great question, you know? As as we've stated a lot of our revenue and our R is really dependent on us being able to bring on capacity and, you know, and because capacity really has been the bottleneck. That's why we've seen, you know, a little bit of that, uh, that, that, that Trend. However, as we're bringing on a lot of capacity in Q4, you should see that, uh, that incremental are and Q4 will be significantly higher.
Plan to achieve connected capacity of 800 megawatts to 1 gigawatt by the end of 26.
How are you thinking about CapEx, and what is your philosophy on CapEx spending?
I think arcati. Can I take this? Should take it.
Uh, again and again, uh,
as we see, at least this year, uh, our Revenue growth was limited by our capacity and everything we we built was ultimately sold.
So, in theory, uh, we should try to build as much as we can in practice though. We are limited by certain physical world limitations,
Physical world cannot grow 5 or 10 times a year. Uh, we have limitations in supply chain and obtaining permits amount of capital uh, that we can deploy it.
so uh when we plan uh for data center crops, there are actually 3 stages there
The first stage is securing the land and Power.
The second stage is building the data centers themselves to show electrical and cooling equipment, batteries, and so on; physical installation.
Uh, which were called connected power, and the third part is finally deploying the gpus themselves.
And if you look at it from the capex, point of view, roughly speaking, uh it breaks into 3 spending blocks.
So, first stage security lended power, it's pretty cheap. Uh, it's around
Again depends on the scale but it's around 1%. Uh of total capitals for securing. Force for extremely interesting, the second stage building with this building connect so is something around. I don't know. 18, 20%.
And the remaining 80%, the main part is for deploying. The actual gpus, this is the main part of capex.
So uh, if you want to build as much as our Capital uh will allow us.
What should we do first? We should secure as much capacity as we can, because the cost actually, it's not. So, it's, it's an immaterial at this scale.
Second, we should build as much as our Capital allow us.
And third, we will feel gpus uh in line with contracted or clearly visible demand. We will need this massive 80% spend will come only when we see real demand.
Uh, that's why we say that in 2026, we will be securing 2.5 gigawatts of total contract capacity, and we are planning to physically build.
800 to 1 gigawatt of connected data centers.
This will be done by the end of next year.
Great, thank you. Okay.
Let's see. Another question from Alex Duval at Goldman Sachs. Uh, you have announced your target is 2.5 gigawatts of contracted power, whereas before it was 1 gigawatt.
Is it fair to assume that if you get 2.5 gigawatt, uh, this will equate to over 20 billion of Revenue.
By when do you envisage you could do this, and how maybe it will give this to Andre?
Thank you, Neil. Um,
I guess, uh, it's fair to assume, but, um, as our colleague just mentioned, we will, we are secure in the access to the power and the ability to build. But we will inverse CICS, actually in building out and deploying the GPU in those, uh,
Keep in mind the constraints that we have with the capital and according to the demand in the future, uh, periods.
It's just important that we are able to accelerate when it will be needed. We don't like being blocked by capacity constraints all the time.
Okay.
All right, um, take another question from online. Is it in a situation when, when you are sold out is that the same issue, um, or is that really an issue with your future growth and differentiation of servicing, a broader range of customers Mark. Can you take this 1?
Uh, certainly. Thank you, Neil. Uh, it's a great question. Um, I mean, in theory, uh, the situation of being sold out is a nice problem to have.
Um, for our business model. It's, it's really important for us to be able to, uh, not only service large tech companies, but also be able to support our AI cloud and, and a very diverse set of customers. As a matter of fact, servicing startups and software vendors, and Enterprises is, um, not only about delivering on their capacity needs today. We want to build Partnerships with these customers and help them to meet their capacity requirements in the future, especially with Enterprises, because they don't want to actually have a multitude of vendors. They prefer to align with the Strategic partner. Um, that's why um, we are working very closely with Andre and as, as Andre mentioned earlier, you know, as we look forward, um, and think about deploying capacity, it's going to be based on the demand that we're seeing out there. So utilizing the
The pipeline that we're building and the demand that we're experiencing to work with Andre to identify the capacity that we should deploy. It's a very dynamic model that we're trying to put in place.
Great. Thank you, Mark. I appreciate that. Um,
We have a question from Neil Choi from Northland, who's asking, you know, going, you know, so you've done equity deals. We've also done, you know, equity-linked deals as well.
you know how, how will we focus on debt, um, and asset back financing for for a large deals.
Thank you, Nicole. Well, as you know, this is a capital-intensive business, and as we've said previously, finding our growth will require raising a significant amount of capital.
In this context, we are actively evaluating a range of financing options today, including asset-backed financing, corporate-level debt, and equity financing.
And we are working on our fronts in order to maintain a disciplined capital structure to maximize our shareholder value.
With regards to asset backed financing, we believe that we will be able to secure such a facility with attractive terms supported by the creditworthiness of our largest customers. I would like to reiterate that as we are growing our business. Our focus and ultimate goal is to maximize our shareholder value.
Great. Thanks. Do
And maybe just sticking on the theme of of financing uh from the online portal. Um you know why are you planning to pursue an ATM? You just completed a secondary and and uh and this will result in additional solution to shareholders
We will be put in an in place and at the market Equity program for up to 25 million Class A shares. And we plan to file a prospective supplement tomorrow,
We want to make sure.
That we have more tools at our disposal to access Capital markets when needed.
This is a long-lasting program which will be used along with other Capital raised options, including corporate debts as a bank financing and others, as I mentioned, in my opening remarks and just before this question. So the program enables us to access Equity funding on an efficient ongoing basis. However, we will remain delusion sensitive as we seek to finance future growth opportunities,
Great. Thanks. Tyler.
Um, see another. Another question from online.
How are the early operations of your new UK facility progressing? Tom
Yeah, no, absolutely. So short answer is progressing. Very well you. You may have seen just actually last week aadi and a few of us were there. We had our official launch. Um, as we brought the dates, uh, presented the data center to the UK Market, this is actually capacity that will be coming online really actually in the next week or so. So pretty very in the coming days.
Um, you might remember actually that in June was when we first announced Our intention to launch in the UK and actually even in the time since June and now we've already come close to doubling the capacity that we're bringing on stream, you know, and that's just really a function of extremely strong demand that we're seeing um in in the UK.
Um, and actually, as is often the case with the new capacity that we bring on, even before going live, we're pretty much sold out. So, I think we're not already fully sold out with our capacity. Um, so that, you know, that’s a trend that just continues.
I would just say overall a few words about the UK, actually. I mean, we're, we're very bullish actually about the opportunity in the UK. It's vibrant AI Market. Um, you know, it's probably 1 of the most dynamic that we see outside of us and China.
And then making a big push to support the growth of the industry and having a reasonable degree of success in this field. Um, so there's a, we see a lot of AI startups VC. Environment is is, is is strong. You also see some of the kind of the large tech companies establishing Regional R&D and presence there. So really there's a lot, there's a lot happening in the UK and we think a lot still to come for nebus in the UK and we're very happy to be there. And actually, although this specific facility that we have, I think with the capacity, once by January, will have reached, the peak capacity that we see a lot of other, um, opportunities to expand capacity in the UK overall,
Great. Um,
Let's see, in terms of, you know, we'll take another question on on capacity. Um, so, you know, you mentioned this quarter that you're fully sold out of available capacity, what are your constraints to Growing, um, in the near term and medium term to capture more of that demand? And could you also address some of the recent comments? Um, the market around Power Equipment, constraints.
Yeah, I'll take it. Yeah. Um thanks Neil.
as we discussed in most of the previous question capacity remains our main bottleneck, everything, we deploy, we sell
and we see the
Demand, that continues to significantly. Our street was like each time we add new clusters.
So in near term, the key challenges to increasing capacity securing power.
And uh, supply chain and we addressing this.
we have managed the situations in the past um have quite quite a bit of expertise, both building on the data sensors and operating those
So overall, we have mentioned, generally speaking, we are doing quite well, actually, with the pipeline.
And when we spoke last quarter, I believe that we announced that we have secured uh the road map of the the the 1 gigabyte of the power. Now we are talking about
uh, the number 2.5 gigabytes and
uh,
we, we are still putting a lot of focus on growing this number and making this number reliable and effective and actually bigger
great.
Thank you, Andre.
And online, we're getting just a few questions about any updates on the New Jersey facility. Andre, do you want to take that?
Yeah, New Jersey facility. Um, goes as planned and uh the first trans
uh,
already was.
Handed over uh, to Microsoft and we are we are continuing continue on the further expansion. Great
All right. Uh, looks like a question from online. Um maybe more of a market question. Um, are you concerned that we are in an AI bubble arati?
We ask this question these days.
uh,
Well, uh, what we see today, uh, the demand, the demand is here, right? Yeah. We understand that we are in the center of the once-in-a-generation AI evolution.
Uh, much no doubt that much more compute will be needed and much more will be built.
Uh, this Sation of unbalanced demand Supply is temporary, of course, eventually demand Supply uh will level up.
and uh,
Uh, what we are doing. Uh, in addition just to Growing this raw capacity, we are building our AI cloud.
Uh, which will support real businesses and really industries. Real enterprise markets with AI will be making value.
Uh, we are a big believer in the PI industry, in general. Uh, you know, 63, it's going to be okay.
uh,
Ultimately we just need to be sure that a uh with Diversified in terms of customers and workloads and this is actually what our software is basically doing.
uh, be uh
that we invest conservatively and, uh,
Uh, that we Finance.
And uh also uh while we're growing rapidly 5 times more a year.
uh, we still remain larger focused on maintaining Health margins and a sustainable business model as a whole
In old days I would say healthy, use unit, economics.
So we are focusing on that.
And whatever comes will come, I would hope that we will be okay.
Great. Thank you, ricciardi.
Uh, next question is from Alex Platt. From da Davidson. How should we think about the lead time between when power is connected to? And when it is hooked up to gpus and generating Revenue, Andre,
Yeah, thanks Neil. Um
So on the technical side, it also depends if it's a new site or if it's an expression on a current site. But generally speaking, from the connected power,
And uh start of the GBA deployment until it can go in the platform engineering revenues anyway from 6 to 12 weeks, if it's already existing site that can be even quicker.
um,
but really we also have a flexibility. That's why we're building infrastructure. We have everything.
uh, when we deploy and, um,
We?
um, when the deploy and how much we deploy,
great.
Thanks, Andre.
All right. Um, question from online. Can you update us on your progress with your primary customer site?
mark,
can you help us with this?
Certainly, certainly. Um, we continue to see, um, extremely strong demand from our customers in our core AI business.
And we're continuing to expand um uh business overall with our existing customers. Um, we as a matter of fact, we added a number of new customers in Q3. Uh most notably some very disrupt uh disruptive startups like uh, cursor, AI, uh, Black Forest labs and and World labs.
I'm sure everybody's heard of cursor. We're very, very proud to be their partner. Uh, for those that haven't, they're an extraordinarily popular AI, powered code editor, that is helping millions of developers to write and debug and optimize their code faster, and they're making great strides into the Enterprise. Um, black forest Labs, uh, is a interesting, uh, customer that is developing, uh, Cutting Edge generative, AI models, uh, specifically for image and video generation. Uh, they're popular flux. 1 model, helps turn text and images into high-quality media ready uh visuals.
And, and World Labs, um, is building something, they call a large World model, which is able to simulate 3D worlds and it gives developers and AI Engineers. The necessary spatial awareness to build applications for things like, uh, media and gaming and Architectural design and, uh, as well for physical Ai and Robotics. Um,
We've also, as I mentioned, seen expansion with existing customers. As a matter of fact, um uh, as an example we've seen um, expansion with our software vendor customers, uh, like Shopify.
um, and then also, we've made great strides with our um,
efforts around driving vertical, uh, Market success, adding significant customers in our Healthcare Life Sciences, uh, part of the business and we're also making significant advancements in uh, physical Ai and uh, media and entertainment, uh, uh uh, customer segments
Right. Thank you, Mark.
Um, give you a question to to looks like this is a question for do. Um, few people are asking and he puts and takes that you can provide uh on your revised 2025 year-end Revenue guidance.
Well, our business is how to scale in rapidly. There can always be fluctuations in the exact time of deployments in sets of fast growing company like ours.
This was a continues to be our main focus.
In any event, our annualized run rate revenue.
Which is a better reflection of our future growth opportunity, continues to expand, demonstrating the resilience and scalability of our business model.
As such, we remain well on track to hit our guidance range of $900 million to $1.1 billion at the end of 2025, while also paving the way for substantial revenue growth in 2026 and beyond.
Great. Thank you data.
See, uh, a question from the online, uh, Community. Uh, how is your Enterprise initiative ramping up? We seem to have made some good improvements there over the past couple of quarters. Mark, do you want to help take this?
Uh certainly certainly, um, yeah we are making strides with regard to um, becoming Enterprise ready. Um, as you saw with the launch of nebas 3o, what we call Aether, um, we've delivered a number of AI Cloud improvements to support Enterprise requirements. Um, as an example, um, in the 8th or release, um, we are delivering really important. Uh,
Compliance and security certifications. Um, and we did this, as a matter of fact, in a matter of months, uh, when it would normally take other organizations, a lot longer to deliver these types of capabilities. Um, as a matter of fact, um as well, we delivered some important functionality, uh, that enables um, Enterprise administrators to proactively manage their implementation, uh, so tooling and controls like identity, and access management, and uh, dashboards for, um, evaluating the performance and security of their implementation. I think, as we all know, the, the sort of the critical foundation for Enterprise Readiness is to have these kinds of compliance and security certifications in place. And the um Enterprise functionality that enterprises are looking for and the third is um to have an Enterprise ready, sales team um on that front.
Um, we are adding a number of key leaders to our organization, um, and we are expanding the overall, uh, uh, sales organization for coverage in, um, enterprise software vendors and key verticals. Um, it'll take some time for the sales team to ramp, uh, but we are building the foundation between the functionality that I mentioned and the, um, overall team coverage.
That, I think, will set us up for a strong 2026 with Enterprises.
Great. Thank you, Mark.
um,
keeping with our online investor base. Uh, you know you recently launched token Factory. What is the opportunity around this and will this? Expand your Market or open up new segments? Maybe we'll ask Roman to take this 1.
Yeah, thank you, Neil. I have to talk about our new launch.
So, uh, I will start a little bit from demand evolution.
We fairly see now the next way, way of AI demand, uh, growth.
And it mostly driven by the companies, by the people who apply AI to real world applications across all Industries uh in b2c and B2B uh it's not necessarily A foundational model, Builders like it was uh let's call in the first wave.
and,
We as neighbors realized that we needed our inference as a service offering to make uh to make it serve uh broader set of customers, including Enterprises.
So token Factory gives vertically a product Builders isvs and Enterprises a platform to build. Um,
We call it the flywheel of applying elements in vertical AI use cases at scale, transforming. We help them to transform open-source models into optimized, production-ready systems with guaranteed performance and transparent cost per token.
uh, we
Obviously, leverage the underlying infrastructure to bring the most efficient scalable solution to our customers. Um, when they can be sure that
That total cost of ownership can confidently grow with us.
uh,
So, as a result, organizations can deploy and scale models such as, uh,
open, aios cran, deep sea, clam, and imatran, and many others, uh, on dedicated endpoints with guaranteed Performance Tuned for
The.
Super latency and, uh, 99.9% uptime.
So in total I I must say we are excited about the opportunity of inference workloads. Uh
We believe that all companies will invest in inference to productize AI.
And it for us. It mean like it will require significantly more compute and will support this wave of growth as well as we do for.
uh, Foundation model builders
Great.
Thank you Roman. Um,
Jumping back to online. Looks like we have some additional questions here. What demand are you seeing for new Blackwell generation? And how is this demand from the previous Hopper generation?
mark,
Yes certainly, thank you Neil. Um
Demand remains very strong across all types of gpus. And as we said, we sold out our capacity in Q3 and that's across all types.
and we're nearly sold out, um, with respect to Q4, um,
talking about The Hoppers. Uh, we continue to see extremely positive demand for these chips. Um, an interesting set of dynamics that we're experiencing is that as customers come to their renewal uh for Hoppers um or if they're looking to upgrade to say Blackwell's.
In both cases, we're typically selling them immediately, um, and often case and often um, at uh, better pricing than they were previously priced, um, as we're actually in tandem rolling out the Blackwell. So very strong demand profile for existing hoppers.
We're also seeing very strong demand for Blackwells and we're benefiting from the fact that, um, we're 1 of the first companies to deliver them, uh, in the market, um, in our Israel, uh, data center. We launched with b200 and, uh, in our UK, uh, data center. We we launched with b300s and we've
essentially pre-sold much of that capacity before these facilities even opened
Um, we're very excited as well that, uh, we're launching GB 300s. Uh, we're the first to do so in Europe, uh, which will be coming online in our finished data center. Uh, later this quarter in December,
um,
Thinking about in production capacity uh right now as I mentioned selling the remnants of Q4 but we're also Now pre-selling new capacity uh being delivered in future quarters.
Um, so uh, we're seeing a very strong demand across all types of uh, gpus. And as I mentioned earlier, and as Andre mentioned earlier, we're working in close, uh, partnership with Andre's team to make sure that our sales pipeline, um, allows us to drive our model in order to be able to support uh, GPU requirements in subsequent quarters.
Perfect. Thank you, Mark. Um, another question from Alex Platt, uh, from da Davidson, uh, he's asking about our strategy regarding larger deals. Do we have medium-term capacity? Targeted for these deals and customers, uh, okay. Uh, oh yes, uh,
We are very opportunistic here. Uh, the demand is there uh not only for uh our Everyday deals but for large Mega deals as well.
And, uh, we will enter into the deals which provide us with the best margins. Uh, we're very much focused on, uh, margins and profitability.
uh, not only in growth itself, uh,
And all our decisions actually uh, direct from there.
Great. Thank you.
Uh, next question from Andrew Beal from our, um,
Do you have Louis for further new us and EU DC locations? Or are you further down the road, uh, with these?
Andre.
Yeah, thanks. Nope. Uh, generally, we are making great progress. We have a robust pipeline.
both in Europe and us.
Um, we mentioned that we're on the way of securing 2.5 gigawatts of.
Well, both map for the power. Uh,
In, in the next year.
We are in fly station also further, down the road as well.
um, but we are not in a position to save more, uh, this stage
great.
all right, uh,
Question from online: Can you provide an update on your facility in Israel? Tom.
Yeah, sure. So as you can see, we're growing rapidly. Uh so just last week, we were in the UK launching and just a couple of weeks before that we were we were in Israel. Uh and actually the the they sent facility there, we have there is already Fully live.
Um, and as I think we've made various references to Mark mentioned, previously again, that was capacity. That was effectively even pre-sold. Um, and we definitely have opportunities to expand further in terms of capacity,
Um, we think Israel is a great Market. Uh, you know, we we again we see a lot of demand, there's a lot happening in Tech and in AI, um, and actually, 1 of the things that's interesting about the market, I mean, our decision to go in there was purely based on our own commercial considerations. We think there's a great. There's a lot of growth for that. But actually, the government's also doing some interesting things, um, really to stimulate further demand. And so they're actually effectively putting money to subsidize uh, sort of AI startups and, uh, institutions and and helping them to access the compute as a way of getting, as having the growth move faster. So we think it's uh, anyway we're doing great there. We have a, we think that there's a great opportunity for us and actually the the model that might even be a model that we think I'd in other countries, might might might look at that. Are thinking about building up their their domestic demand and and AI industry. So overall going great.
Great. Thanks. Tom.
All right, uh, from our online platform. Uh, let's see, how do you think about partnering with or buying potential companies that already have secured power, or land or a consolidating or consolidating other Neo clouds?
Well companies we should keep on land. Yeah I mean again it's all about margins.
uh, we pretty much focused on uh,
the margins, when we enter into, in, in your contract, when we were raising Capital, when we developing new plots for the centers,
When we designed them for the centers, when we built our own racks, software, and so on,
And we we vertically integrate and we looking of on efficiency on each stage.
Uh we have looked into the potential Acquisitions of power land market. Uh but so far, our approach Pro proved to bring let's say much higher margins so far.
uh,
So, we are still moving further and further into building our own facilities and, uh, we actually decreasing the share of our own over, uh, collocated branded facilities, more and more. We will be out. How, how, how? How our facilities.
uh,
obviously, we will continue to consider different opportunities. Uh, but uh, as you can see, uh,
We, we were able to secure significant level of contact power organically.
Uh, so we strongly believe that rather than later. Uh, the margins for the infrastructure business business will play, uh, a significant role, uh, in the ability uh, to
uh,
The business is to grow and develop, and we basically remain very focused on that.
Great, take care.
All right, let's uh, another question kind of Market related question. Um, maybe additional go to your archive? Is there any chance that gpus are oversupplied and the coming year as new suppliers come to the market?
Uh,
uh,
means that uh, they send the capacity will be the joy point.
Uh, uh, also, as we mentioned earlier with 1, um, our capital spend in those systems has three stages.
Uh, land power built in the shell and facilities. And then CPS.
and uh,
this conservative staged approach uh keeps us uh from always pending actually and allows us to maintain healthy financial position.
uh,
If there are any changes to the market, we will be in good shape to handle any downtime, we hope.
Thank you, Ari.
Um, let's see.
A couple of our analysts are asking, um,
You know, uh, in terms of, you know, any any big challenges, um, regarding the completion of the Divine land facility, um, or you know, any you know, challenges to meeting. You know, any performance obligations out there, Microsoft deal
I, I think I already spoke about this. Uh, so yeah, as of today, uh, it goes as planned and we already handed over the first Branch to the Microsoft. So yeah, continue on working, according to the plan, great.
Thank you.
All right. Uh, I think we'll
End the call there. Thank you, everyone, for joining, and we will speak to you again next quarter.
you, you